Buy Trent: target of Rs 800: Sharekhan

Sharekhan's research repor on Trent

Q2 revenues recovered 55% as all stores became fully operational after easing of lockdowns. Recovery rate improved from 38% in July to ~70% in October. Company prioritised cost cuts by slashing employee expenses, discretionary spends and renegotiating rentals. This is likely to sustain and support profitability to some extent in the near term. As 100% of Westside merchandise being manufactured in-house, we expect Trent would bounce back faster. Product innovation, aggressive store expansions and leveraging digital presence will be near-term growth drivers.

Outlook

We recommend a Buy on Trent with a price target (PT) of Rs. 800. Trent is among India’s strong branded retail players with robust balance sheet, stable cash flows and among the highest utilisation rates per store.

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